Compromise Born Of Ineptitude

October 3, 2007
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Betsy DeVos released a statement in April 2004 as the Michigan Republican Party state chair that cited high union wages in Michigan among the probable causes of the state’s economic woes. Five seconds of her statement aired over and over again in statewide media reports to an outcry from political leaders far and wide. And although many folks had been whispering the same sentiment under their collective breaths for quite some time, they bit their tongues and did not provide significant public support to back the calculated beliefs expressed by DeVos.

“Many, if not most, of the economic problems in Michigan are a result of high wages and a tax and regulatory structure that make this state uncompetitive,” her statement read at the time. She has said in subsequent interviews that her “desire was to see every Michigan worker do as well as they possibly can. You’re not going to have the kind of line-job for GM that two or three generations before might have had, but I hope — and would expect — that if we make the playing field attractive enough for business, the jobs of the future are going to be even better jobs.”

The state of Michigan is finally pursuing a more sensible business tax landscape, and there is evidence industry and labor are willing to work together to ensure their operations’ long-term future, exactly the points being made by DeVos and others for many years. We’re left to hope all of these efforts don’t result in “much too little, much too late.”

The tentative agreement reached last week between General Motors Corp. and the United Auto Workers sparked what will be ongoing debate and dialogue about who won: GM or the workers. But the real winners appear to be the residents and taxpayers of the state of Michigan — not that they were the first audience of concern to either GM or the UAW. They certainly haven’t been in the past.

The mess created by decades of corporate mismanagement, combined with inconsistent representation and lack of sensible long-range vision on the part of union leaders, put GM and other domestic automakers on the brink of collapse. This foreboding circumstance was made worse by ominous backroom threats regarding pleas for government bailouts going back to the Engler administration. These proposals particularly focused on plans to rescue — with public tax dollars — overextended and mismanaged pension and retirement benefit packages. Can anyone imagine the state of affairs in Michigan, in light of the current budget turmoil, if such pleas for help from the Big Three had been answered?

The continuing aura of inept management practices and blind entrenchment of the unions made for the perfect storm that more than necessitated a compromise.

GM’s wrists had been slashed by the self-inflicted wounds of retiree health care obligations that were making it nearly impossible to compete with worldwide rivals, not the least of which is upwardly mobile Toyota. GM has evidently achieved enough cost-cutting measures to put itself in position for a workable pension system and removal of the expensive, negotiated retiree health care obligations. This circumstance, if it achieves fruition, makes it more likely the company can focus again on its core business of making and selling vehicles.

A new attempt to keep plants operating and to level the rocky competitive horizon appears to be at hand. But as we enter this new frontier, let’s not forget, and certainly not repeat, the blatant and obviously arrogant mistakes of the past.    

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